Justin Mahwikizi, an Uber driver, sued Uber Technologies, Inc. and its subsidiary Rasier, LLC in the Northern District of Illinois, alleging violations of the Fair Labor Standards Act, California's unfair competition law, and Illinois state laws. Mahwikizi claimed Uber unfairly suspended his driver account for violating mask-wearing policies during the pandemic. Uber moved to compel arbitration based on the platform-access agreement, and the district court granted the motion, staying the lawsuit pending arbitration. Mahwikizi attempted to block this by filing a petition for a writ of mandamus, which the Seventh Circuit denied. In 2025, the district court ordered a status report on the arbitration. During the hearing, Mahwikizi told the court he did not intend to demand arbitration and would not voluntarily dismiss the case. After the court warned him that inaction would lead to dismissal for failure to prosecute under Federal Rule of Civil Procedure 41(b), Mahwikizi confirmed he understood but maintained his refusal. The district court then dismissed the case.
The Seventh Circuit addressed whether it had jurisdiction to review the district court's earlier order compelling arbitration. Generally, interlocutory orders merge into a final judgment and are reviewable on appeal. However, the court noted that when a case is dismissed under Rule 41(b) for failure to prosecute, interlocutory orders typically do not merge. This exception prevents plaintiffs from using dilatory tactics to delay arbitration while keeping the lawsuit alive. The court cited precedent from the Third Circuit and its own prior nonprecedential order in Kimbrough v. American Express National Bank, applying the same rule to these facts. Consequently, the order compelling arbitration did not merge into the dismissal, and Mahwikizi could not appeal it now. He had two other options: seek interlocutory review under 28 U.S.C. § 1292(b) or arbitrate his claims and appeal later under 9 U.S.C. § 16(a)(3). Instead, he waited two years and refused to comply. Regarding the dismissal itself, the court found no abuse of discretion. A district court may dismiss a case when a plaintiff refuses to comply with court orders, including orders to arbitrate. Mahwikizi's refusal to act for two years left the court no choice but to dismiss the complaint.
The decision reinforces that plaintiffs cannot indefinitely delay arbitration by refusing to comply with court orders and then appealing the dismissal to challenge the arbitration mandate. It clarifies that the merger doctrine does not apply when a case is dismissed for failure to prosecute, effectively shielding the underlying arbitration order from appellate review in such scenarios. The case was remanded with instructions to affirm the dismissal, meaning Mahwikizi's lawsuit is terminated, and he must arbitrate his claims if he wishes to pursue them, subject to the arbitration agreement's terms.
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